Biden Proposes Tax Hike on the Rich to Strengthen Medicare

The plan comes as Republicans try to use a debt ceiling standoff to safe long-sought cuts to federal applications.

President Joe Biden on Tuesday unveiled a plan to increase Medicare’s solvency into the 2050s by elevating taxes on high-income People and chopping prescription drug prices, a proposal that Biden offered as a substitute for GOP assaults on the healthcare program utilized by tens of thousands and thousands of seniors.

“If the MAGA Republicans get their method, seniors can pay larger out-of-pocket prices on prescribed drugs and insulin, the deficit might be larger, and Medicare might be weaker,” the president wrote in an op-ed for The New York Instances. “The one winner underneath their plan might be Large Pharma. That’s not how we prolong Medicare’s life for an additional era or develop the financial system.”

In accordance with an outline launched by the White Home on Tuesday morning, Biden’s proposal would “prolong the solvency of Medicare’s Hospital Insurance coverage (HI) Belief Fund by at the very least 25 years” by elevating the Medicare tax fee from 3.8% to five% on each earned and unearned revenue above $400,000.

“When Medicare was handed, the wealthiest 1% of People didn’t have greater than 5 occasions the wealth of the underside 50% mixed,” Biden wrote Tuesday, “and it solely is smart that some changes be made to mirror that actuality immediately.”

The plan additionally proposes empowering “Medicare to barter costs for extra medication and bringing medication into negotiation sooner after they launch,” constructing on provisions of the Inflation Discount Act that Biden signed into legislation final 12 months. The White Home plan would then credit score the financial savings from the drug value reforms — an estimated $200 billion over 10 years — to the HI Belief Fund.

The Medicare plan is a part of the president’s sweeping fiscal 12 months 2024 price range blueprint, scheduled for launch later this week. The price range will possible embody a spread of administration proposals that don’t stand an opportunity of clearing the Republican-controlled Home.

In its 2022 report, the Board of Trustees for Social Safety and Medicare projected that the HI Belief Fund — Medicare Part A — “will be capable to pay scheduled advantages till 2028, two years later than reported” in 2021.

“At the moment,” the trustees report famous, “the fund’s reserves will turn into depleted and persevering with whole program revenue might be adequate to pay 90% of whole scheduled advantages.”

In his Instances op-ed, Biden declared that “we must always do higher than that and prolong Medicare’s solvency past 2050.”

“Let’s ask the wealthiest to pay just a bit bit extra of their justifiable share, to strengthen Medicare for everybody over the long run,” the president wrote. “This modest improve in Medicare contributions from these with the best incomes will assist maintain the Medicare program robust for many years to return. My price range will be certain that the cash goes immediately into the Medicare belief fund, defending taxpayers’ funding and the way forward for this system.”

Biden put forth his plan as he continues to face progressive criticism for operating a pilot program known as ACO REACH, which physicians warn might outcome within the privatization of conventional Medicare.

The president’s plan additionally comes amid a debt ceiling standoff that Republicans try to use to safe long-sought cuts to federal applications. Home Republicans have additionally floated changes to Medicare, together with a rise in this system’s eligibility age.

“MAGA Republicans on the Hill say the one method to be critical about preserving Medicare is to chop it,” Biden wrote in a Twitter publish on Tuesday. “Properly, I feel they’re flawed. I’m releasing my price range this week. In it, I’ll suggest a plan to increase the lifetime of Medicare for a era, with out chopping advantages.”

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